New Delhi: The Centre will keep vigil to ensure that the benefits of GST rationalisation are passed on fully to consumers, Union minister Piyush Goyal said on Friday, stating that the industry has given him assurance that the entire fall in taxes on various items will be reflected in their prices.
The GST Council’s decision to bring all products, except sin goods, under 5 per cent and 18 per cent slabs, while reducing it to zero on a host of essential items, will kick in from September 22, the first day of Navratra.
Addressing a BJP press conference, Goyal also rejected the contention that the US decision to impose a 50 per cent tariff on India might have prompted the Modi government to turn to reforms, as he said that the decision was an outcome of nearly a year-long consultation among secretaries and finance ministers of states and the Centre.
“This decision (GST) has no link whatsoever with any decision of any country. Such a big change cannot happen overnight,” the Minister of Commerce and Industry said, noting that the US decision was made only last month.
While the Centre will maintain vigil to ensure that consumers get the full benefits of reduced taxes, states should also monitor it, he said.
With the Congress and its allies taking swipes at the government for “delayed” rationalisation of the Goods and Services Tax regime, he hit back, saying they have exposed their own incompetence as they could not roll out the GST during their stint in power during 2004-14 and were only busy in “corruption”.
He accused Congress governments in Karnataka and Telangana of trying to obstruct the GST Council, which is headed by Union Finance Minister Nirmala Sitharaman and includes finance ministers from all states, from approving these reforms on September 3 because it will “expose” their own party. The decision was finally taken with consensus.
Attacking Congress leader Rahul Gandhi, Goyal said he is like a rocket which could not take off despite numerous launch attempts. He himself does now know what he said on some issue earlier and what he is saying now, and people of the country are not affected by his comments.
Replying to a question, the minister insisted that the Union government’s decisions are not guided by elections and recalled an incident of Prime Minister Narendra Modi pulling him up for suggesting that an investment project in a poll-bound state, which Goyal was to announce, will benefit the BJP.
Modi asked him not to make the announcement till the polls, he said, adding that the BJP anyway won and the project was announced later. He did not name the state.
The politically crucial state of Bihar is due for assembly polls in a few weeks.
Goyal praised the rationalisation as historic and extensive reforms, which will reduce the prices of almost every product used by all sections of society and benefit every sector of industry.
He said every product under the Modi government has less tax than it did during the Congress-led UPA government, when consumers and industry were burdened with a bevy of complex tax regimes and corruption allegedly flourished.
It is probably for the first time since Independence that such a sweeping reform in indirect taxation was effected, he said.
Goyal asserted that India lacked the current economic strength in 2014, the year Modi took over, ending 10 years of the UPA rule, as the preceding government took no “transformational” step and was plagued by “corruption”. It was full of promises but took no action, he said.
He said finance ministers of the Congress government spoke of bringing in the GST, but states did not trust it and did not have confidence that the Centre would compensate them for any revenue loss caused by the single taxation regime.
Modi made it clear that his government will compensate them not only for any loss but also for any shortfall from 14 per cent annual growth in their revenue collection from the GST for five years, the Commerce and Industry Minister said.
He added that the government continued to simplify the tax regime to the benefit of consumers and industry since its rollout in 2017 and accused opposition parties of misleading people by levelling baseless allegations over the issue.
The latest round of reforms will have a multiplier effect on the economy as it will boost demand and spur growth, making up for the revenue shortfall expected from the rate reduction, he said.
